It is not wrong to say that a strong foundation at financial planning can lead to a successful and stress free life. Moving to college is a time where many find new freedom, but if this time is used wisely and planned, you are sure to get a secure future in return.
Basic management skills of living within the budget and managing debts and credit at this stage is the first step towards planning your retirement. Read the following article as it gives you insights about financial planning at the basic college level.
Getting started is half the battle and when it comes to planning financial planning, getting started means winning half the battle. Your first few years of planning and thoughtful spending will make you ready for the future. Learning smart financial moves through your college years leaves you without any unnecessary racked up debt.
So, what is that you need to do in order to take control of your finances during your college years? Here is how you can deal with your finances right at the beginning:
1. Organize YourselfBefore taking the first step forward, it is important that you realize the importance of getting organized and putting things into place. When it comes to finances and education, you are sure to have a list of loans that are piled up during your graduation, that are going to come or are already on your list.
Make a list of your loans that has the complete information including name, contact information and web address. Add a reminder and make sure that you organize the funds at least two weeks before the due date.
2. Become Financially LiterateSo how do you know that the interest that you are paying on your loan is the amount that you are liable to pay? Read more and get every bit of detail about the finances you are putting yourself into. The internet is a vast space that can give you all the information about every financial tool that you are using. Becoming financially literate means you should know how to manage your money. Also, it means that you should be aware about all the happenings. Student loans in most of the countries have lesser rate of interest than the usual.
3. Save as much as you canA monthly savings is a must, even if it is 10% of the entire amount that you plan to spend. It is okay to skip a pizza party or a pool party in order to save for emergency as well as future. In your student life, you get a benefit of compound interest that adds up to the savings you plan once you have a full time job.
4. Be Aware about the Student’s PerksWhether be a book store or a café, students are often offered discounts. Make sure that you have a complete idea about all the perks that you can receive as a student. This may not help you repaying the loan, but the amount you save with the perks can surely let you have your pizza party without moving your savings.
5. Plan your Budget and Stick to itLiving independently requires you to make a budget with the total amount of money that you have. With that you have to be very careful that you stick to the budget that you make for yourself. Avoid late fees, parking fines and other things that can move your budget. You can do some things in order to add to your savings or other expenses. Some of them can be:
- Pay less for text books
- Use technology wisely and set up alerts for your loan re-payment dates and credit card bills
- Be alert and protect yourself from fraud
- Set limits for yourself that let you enjoy in a certain amount of money. Do not exceed the limit that you have set for yourself
You love your apartment or your bike. But at times when your mandatory expenses exceed the limits then make choices of shifting to a cheaper accommodation or find a cheaper way of transportation. Borrow as less as possible because today or tomorrow you will have to return that money. So the borrowed finances may fulfil your today’s need but can give you a bump next month.
Avoid that and try managing in the budget that you had decided. In case you decide to borrow other than the loan you are already paying for your education, you need to understand every term that the lender has and take time to decide whether you can pay back or not.
6. Insure a secured future for yourselfEducation sure is one of the key that help you find a better job and have a secured future. Other than that you should make efforts during your college years to make relationships that help you find better prospective for you. President of ING Direct Investing quotes those personal relationships that nurture in college especially with the seniors can turn into business relationships in the future.
7. Avoid Financial MistakesThe thumb rule for wealth building in financial planning is to earn more than owe. In college life that is practically not possible but keeping that rule in mind avoid using loans for every other college expense that you have.
Do not take a credit card as a source of spending until you have a proper source to pay the bills. Another credit card mistake that you should avoid is to keep transferring your balances to a new card which has lower teaser rates. This has a negative impact on your credit score and can have great effect on the job application that you will have to put in the future.
In the End...
These are some of the planning measures that you must take when you are in college so as to have a secure future. If you practice financial planning in the first few years of your college and job, you shall be prepared well for your retirement. In the future you may hire financial advisors who will give you all the means and measures for a secure future. But the first step towards it, you have to take right away.
Currently a writer, blogger and an avid follower of latest trends in job and education sector, Akansha Arora loves to pen down her views for various domains like studying abroad, financial planning and college life. The above article talks about how students should start financial planning at college level. Follow her at email@example.com
Related: Undergraduate Scholarships for International Students